Three Homebase stores in Tayside and Fife are at risk of closure after a review of the DIY chain was announced by its Australian owner today.
Up to 40 of the worst performing Homebase stores could close as a result of review, which may lead to the loss of nearly 2,000 jobs.
Wesfarmers, which owns Homebase’s parent firm Bunnings UK, said on Monday that trading at the chain has been “poor” as it booked a £454 million impairment charge linked to its acquisition of the retailer.
Homebase operates 19 shops in Scotland, including stores at Dundee, Dunfermline and Glenrothes.
A spokesman for Bennings UK said it was “too early” to say which shops could close.
He said: “It’s too early to say and it’s not appropriate to speculate at this point.
“Our team will always be the first to know of any updates.”
In recent years Homebase shops in Perth and Kirkcaldy have closed their doors.
Bunnings acquired Homebase in 2016 in a £340m deal and has been attempting to reposition the brand.
But poor trading at the home improvement group is expected to drag Bunnings into an underlying loss of £97m for the first half of the year.
Wesfarmers managing director Rob Scott said: “The Homebase acquisition has been below our expectations, which is obviously disappointing.
“In light of this, a review of Bunnings UK has commenced to identify the actions required to improve shareholder returns.”
The group later confirmed that between 20 and 40 of the worst performing Homebase stores could close down in the latest sign of distress on the British high street.
The chain currently operates 250 stores and employs 12,000 people in the UK.
“We need to address underperformance in our portfolio that is detracting from positive performance in other areas, and the announcement today sets out decisive actions to achieve this,” Mr Scott added.
As well as revamping the stores and slashing prices, Homebase is in the process of being rebranded as Bunnings.
But Wesfarmers said that its review will evaluate the performance of rebranded pilot stores to “inform the future plans for Bunnings UK”.
In addition Peter Davis, the man who spearheaded the foray into the UK, is to retire from the business with Damian McGloughlin taking his place.
The potential store closures come following a miserable January for the high street, which has seen thousands of jobs disappear after Sainsbury’s, Tesco and Morrisons also swung the axe.
Retailers have been hit by a surge in Brexit-fuelled inflation, which has seen the cost of goods rocket and consumer confidence plummet since the referendum result.